CORPORATE GOVERNANCE REPORTING AND PRACTICES: AN EXPLORATORY STUDY OF MALAYSIA

The increased interest in corporate governance has stimulated a growing body of research in the area. One of the commonly used techniques to analyse corporate governance practices is to review corporate annual reports. However, in Malaysia, annual reports are seen to be less effective in conveying useful corporate governance information to the users either due to the disclosure of information that is not relevant to them or that current users demand more from the contents of annual reports. Users also consider other sources of information about the companies as more reliable, trusted and easily accessible relative to a firm's annual report. This has brought attention to the limitations of the present rule-based governance system. Annual reports have failed to communicate corporate governance information to the public. Ticking off boxes for compliance only leads to a false sense of security that the right judgements and right actions are being taken. In this study, interviews with 'boards of directors' and 'governance experts' uncovered some of the inadequacies pertaining to corporate governance reporting in Malaysia and identified how they could be addressed. The findings provide clearer views regarding this issue and can assist security regulators to improve and promote good corporate governance among Malaysian government link companies.